The rate of Vehicle Excise Duty (VED/road tax) evasion in traffic has jumped from 0.6% in 2013 to an estimated 1.8% in 2017. However, around 1.9% of all vehicles on the road are unlicensed – equating to a total of 755,000.

This could cost more than £100m of lost VED revenue, the Department for Transport figures reveal.

The report’s author, Mike Dark, wrote: “The increase could be due to the effect of major changes to the vehicle licencing system which took place in October 2014, especially the automatic refund of tax when a vehicle changes hands.”

The other big change was that drivers were no longer required to display valid tax discs in windscreens and no new paper discs were issued.

Nicholas Lyes, RAC public affairs manager, said these figures are extremely concerning as the Treasury expected abolishing the paper tax disc would save £10m, yet it’s cost £107m in lost revenue.

“It appears that having a visual reminder was an effective way to prompt drivers into renewing their car tax – arguably more drivers are now prepared to try their luck and see if they can get away with not paying any vehicle tax at all, or are simply forgetting to tax their vehicle when they are due to. What’s more, a third of untaxed vehicles were those that changed hands, which is a strong indication that many drivers are still not aware that tax does not carry over when ownership changes.

“The principle of abolishing the tax disc to introduce greater efficiencies has, so far, evidently failed. More must be done to educate drivers about how and when to tax their vehicle, coupled with stronger enforcement to genuinely make drivers who evade vehicle tax feel that they are going to get caught.”

The figures also revealed that 51% of old cars (10 years or more) were unlicensed while 9% were new (two years or less). The evasion rate for motorcycles is higher at 5.8%.

Regionally, the West Midlands (2.1%) and North West (2%) showed the highest rates of evasion while the East of England had the lowest rate at 0.8%.